China’s DeepRoute.ai Secures $100M to Lead Autonomous Driving, Eyes 200,000-Car Rollout by 2025

Chinese autonomous driving innovator DeepRoute.ai has raised $100 million from an unnamed local carmaker, aiming to outfit 200,000 vehicles with its advanced driving system by 2025. This bold move positions DeepRoute.ai to gain an edge over Tesla in the competitive Chinese market.

DeepRoute.ai Secures $100 Million Investment to Drive Expansion

In an effort to gain traction in China's autonomous driving market before Tesla, DeepRoute.ai, a Chinese developer of the technology, announced on Monday that it had raised $100 million from an automaker, SCMP reports.

The CEO of the Shenzhen-based startup, Maxwell Zhou, told Reuters that the company plans to double the number of cars equipped with its advanced assisted driving system on Chinese roads by the end of 2025 from the current 20,000.

Advanced System Aims to Rival Tesla’s Full Self-Driving

The system can handle city traffic in a manner comparable to Tesla's Full Self-Driving (FSD), which the American automaker plans to introduce in China in the near future.

According to what Zhou indicated, DeepRoute.ai intends to release over ten models with its automotive clientele in the year 2025. Two further models, including one under the smart brand that is co-owned by Geely and Mercedes-Benz, will be delivered to consumers this year, he added, adding that the first model equipped with its technology was released in August.

Data Collection and Licensing: Key Growth Strategies

According to Zhou, the expanding fleet will help the company earn money through technology license fees and gather data that will help its AI system adapt more quickly to manage more complex traffic scenarios.

The only investor in this round of funding is a Chinese automaker that DeepRoute.ai chose not to disclose. The company's current investors include Alibaba, the e-commerce behemoth. Additionally, the company's post-fundraising valuation remained undisclosed.

China’s Autonomous Vehicle Market Intensifies as Tesla Eyes Entry

As the world's largest auto market enters a vicious pricing war spanning hundreds of models, carmakers are vying to offer increasingly advanced autonomous driving features as a selling pitch to entice Chinese buyers.

Elon Musk, CEO of US automaker Tesla, recently stated that the company intends to launch its FSD system in China, its second-largest market, further piqueing interest in the field. As a result, other companies will have to accelerate their growth rates, according to analysts.

DeepRoute.ai Embraces Local Market Complexities

While Zhou acknowledged Tesla's role as an industry trailblazer in applying deep learning to autonomous vehicles, he cautioned that the company would have to adjust to the Chinese market.

"China has more complicated traffic situations with pedestrians walking on motorways and millions of scooters rushing to deliver their goods," he claimed.

Zhou mentioned that his group was also monitoring potential international markets in 2027 and 2028, specifically in the Middle East, Southeast Asia, and Europe, where they saw a need for more sophisticated autonomous driving systems.

Cost Advantage Boosts Competitiveness for DeepRoute.ai

While its competitors and automakers were pouring resources into creating detailed maps of city streets and highways, DeepRoute.ai, which launched in 2019, began building its autonomous driving system in 2020 without utilizing these costly maps.

Zhou speculated that this would pave the way for Chinese automakers to produce a smart EV for as little as 150,000 yuan, or around $21,000, thanks to the substantial cost advantage it now has.